Wine takes an
edge over beer.
For years, the
Associated Beer Distributors of Illinois (ABDI) has been one of the most
successful lobbies at the Illinois Statehouse.
The victory that
comes immediately to mind was when ABDI teamed up with Mothers Against Drunk
Driving to prevent direct sales of out-of-state wine to consumers. The argument
then was that underage kids could buy their booze using that ever so scary
Internet. I wrote at the time that the odd coalition was one of the most
ingenious legislative plays IÕd ever seen.
But if youÕve
read the papers lately or watched TV news youÕve seen that the beer guys are
getting hammered for picking on the stateÕs nascent wine-growing and wine
hospitality industry. The wine industry, it turns out, has finally started to
turn the table on the beer distributors.
What it all comes
down to is that the US Supreme Court ruled last year that states may not, Òban,
or severely limit, the direct shipment of out-of-state wine while
simultaneously authorizing direct shipments by in-state producers.Ó Illinois
law allowed Illinois wineries to bypass distribuors by shipping some wine
directly to consumers and retailers but banned the practice by out-of-state
wineries — which happens to be the law passed by the beer distributors
and MADD several years back.
In response, the
beer distributors introduced legislation that would slap a limit of two cases
per month on out-of-state wineries — the same limit in place for Illinois
wineries before the Supreme Court ruling. Then, as all lobbies do, they went
further overboard in their initial legislation by requiring that the first wine
purchase had to be face-to-face. You couldnÕt just surf the Internet and buy a
couple of cases of wine from Gallo unless youÕd previously been to the Gallo
winery and bought a bottle.
The Illinois wine
industry howled that the beer distributors were trying to put them out of
business. The media has been eating it up ever since, particularly in southern
Illinois, where the winery boom began. The region has been full of articles and
editorials about the ÒDavid vs. GoliathÓ battle. Most editorial boards donÕt
have a lot of sympathy for what they believe to be parasitical middlemen who
make large campaign contributions, and theyÕre in love with the idea of little
wineries dotting the stateÕs landscape. The once hugely effective Òminors will
buy wine on the InternetÓ argument has also fallen completely flat.
Except thereÕs
more to this than the news media is telling you. The wine industry also went
overboard with their own initial bill.
The wineriesÕ
proposal greatly increases the amount of wine that Illinois wineries could ship
directly to retailers. While the amount of wine they were allowed to produce
was doubled, the amount of wine they could ship directly to retailers was
quintupled.
The beer, wine
and spirits distributors arenÕt happy with anything that bypasses them, of
course, but they claim last yearÕs Supreme Court ruling would mean that the big
out-of-state wineries could take full advantage of that proposed direct
shipping language to send thousands of gallons of wine to WalMart and other big
retailers. And they say that beer and hard liquor makers could also use the
loophole to bypass them as well. Since few Illinois wineries are even large
enough to ship that proposed increased amount of wine, the opponents claim the
language was probably intended to apply to the big out-of-state wineries,
brewers and distilleries in the first place.
Also ignored in
every media report so far is the fact that many small Illinois wineries that
use Illinois grapes wouldnÕt have been able to ship wine directly to consumers
if the wine industryÕs own bill had passed as written. Oops. A wine industry
spokesman said recently that the bill would be amended, but the beer
distributors point to the rather large omission as ÒproofÓ that this
legislation is all about a power play by the big wineries out West and has
nothing to do with IllinoisÕ winemaking industry.
ThatÕs also an
overstatement, however. The wineriesÕ legislation would allow many Illinois
wineries to open up ten Òtasting facilitiesÓ each, up from the current limit of
two. Those facilities could be a real profit center for Illinois winemakers,
but the distributors are opposing this idea.
There is plenty
of room for compromise on both sides, but the massive favorable publicity
theyÕre getting means the wineries definitely have the upper hand here.
-30-
Rich Miller also publishes Capitol Fax, a daily political
newsletter. He can be reached at thecapitolfaxblog.com.